Attorney General Becerra Announces Establishment of Division of Medi-Cal Fraud and Elder Abuse

Launches Operation SAFE to further protect elders and Californians living in skilled nursing facilities in response to ongoing COVID-19 pandemic  

SACRAMENTO – California Attorney General Xavier Becerra today announced the expansion of the department’s existing program to protect California’s most vulnerable citizens and safeguard the state’s Medicaid program (Medi-Cal). In response to significant increases in Medi-Cal enrollment and the increased need to protect elders and nursing home residents during the COVID-19 pandemic, Attorney General Becerra has directed additional resources toward the California Department of Justice’s Bureau of Medi-Cal Fraud and Elder Abuse and has elevated the bureau to a full-fledged division, now called the Division of Medi-Cal Fraud and Elder Abuse (DMFEA). DMFEA will continue its mission of investigating and prosecuting fraud committed against the Medi-Cal program as well as physical or financial abuse or neglect of elders and dependents in care facilities statewide. As part of this effort, Attorney General Becerra today announced the launch of Operation SAFE (Stop Abuse and Fraud of Elders), an initiative aimed at further protecting elders and Californians living in skilled nursing facilities during the pandemic.

“All too often, California’s elder citizens and those with disabilities are the principal targets of bad actors. That’s why we have allocated additional resources towards establishing the California Department of Justice’s new Division of Medi-Cal Fraud and Elder Abuse. DMFEA will build upon our previous success aggressively protecting our state’s most vulnerable citizens against fraud, abuse and neglect,” said Attorney General Becerra. “In keeping with this spirit, DMFEA is launching Operation SAFE, a new initiative to ensure that care facilities funded by Medi-Cal are doing their part to keep our loved ones safe during the COVID-19 pandemic.”

In light of the COVID-19 pandemic, DMFEA is launching Operation SAFE, an initiative to protect residents in California’s skilled nursing facilities by investigating complaints of abuse or fraud. The COVID-19 pandemic has taken a tragic toll on our elderly population, with the LA Times reporting that approximately 34% of COVID-related deaths have occurred in nursing homes. Given that the most vulnerable victims of COVID-19 are the elderly and infirm, much effort has been made to avoid exposing this population to the ravages of the pandemic. While the motivation behind these efforts is well-intentioned, attempts to insulate the elderly from exposure may result in more isolation for those in the facility setting, leaving them more dependent on those facilities to provide appropriate care and more vulnerable to abuse and fraud. Through Operation SAFE, a multi-disciplinary team, including agents and medical professionals, will conduct unannounced visits to Medi-Cal funded skilled nursing facilities to investigate complaints of abuse and fraud. Operation SAFE seeks to hold accountable those who abuse and neglect the state’s elderly and vulnerable populations during the pandemic. 

Nationally recognized for its innovative and cutting-edge approach to law enforcement, DMFEA is the State of California’s Medicaid Fraud Control Unit and collaborates closely with federal, state, and local partners to fulfill its mission. DMFEA aggressively pursues criminals who are directly or indirectly involved in filing false claims for medical services, drugs, or supplies. It also pursues hundreds of entities every year for unlawful acts constituting fraud under the California False Claims Act and other key statutes. Based on government and private studies, and on the hundreds of millions of dollars in fraud that DMFEA recovers in a single year, it is estimated that the amount stolen from Californians through Medi-Cal fraud could reach billions of dollars annually. DMFEA also works to protect patients in nursing homes and other long-term care facilities from abuse or neglect. Currently, about 110,000 Californians live in approximately 1,300 licensed nursing homes, and about 150,000 live in approximately 7,500 licensed residential care facilities for the elderly. These numbers are likely to grow, as California’s elderly population is expected to increase to 6.4 million by 2025.

In its new capacity as a Division, DMFEA will continue to build on its previous successes in safeguarding the State's Medi-Cal program. Examples of recent Medi-Cal fraud cases include:

• $1 Million Settlement with Legacy Post-Acute Rehabilitation Center: DMFEA secured a $1 million settlement with Legacy Post-Acute Rehabilitation Center and Legacy Standard, Inc. for alleged violations of the California False Claims Act. The settlement resolves allegations that Legacy wrongfully billed Medi-Cal for patients needing a heightened level of skilled nursing care, known as subacute care, specifically by failing to provide the minimum number of nursing hours for its subacute care unit and assigning subacute patients to non-subacute beds;

• $18.9 Million Settlement with Memorial Health Services: DMFEA worked with the Health and Human Services, Office of Inspector General and the United States Attorney for the Central District of California to announce an $18.9 million settlement with Memorial Health after the health system self-disclosed that it overcharged Medi-Cal for its reimbursement claims for all drugs covered under the 340B Drug Pricing Program – which is intended to ensure the affordability and distribution of drugs to disadvantaged patient populations – from January 2017 to May 2019; and

• $9.5 Million Settlement with Walgreens, Inc: DMFEA worked with other states’ Medicaid Fraud Control Units to reach a $9.5 million settlement with Walgreens. The settlement resolves allegations that the drugstore chain offered incentives to beneficiaries to lure them into its prescription drug program and overcharged Medicare Part D and Medicaid programs in filling the prescriptions. Out of the gross combined settlement, California received $5.3 million.

DMFEA will also continue to prosecute crimes against elders and dependent adults committed by employees in care facilities. These crimes include physical abuse, homicide, sexual assault, false imprisonment, assault and battery. Examples of recent criminal abuse cases include:

• People v. Christopher Skiff: Christopher Skiff, owner and licensee of the Manse on Marsh Residential Care Facility for the Elderly in San Luis Obispo, was convicted of elder abuse and involuntary manslaughter in connection with the death of Manse facility resident, Mauricio Edgar Cardenas. Mr. Skiff permitted the admission of Mr. Cardenas, who suffered from progressive dementia, despite the fact that his facility was not licensed to do so. Mr. Cardenas was known to frequently leave the facility, and on one such occasion he was struck and killed by a vehicle. Skiff was convicted on December 11, 2018, and on January 25, 2019 was sentenced to 180 days and five years felony probation. Skiff has been barred from operating elder care facilities;

• People v. Akinsete: Anthony Akinsete was arrested in February of 2016 and charged with six felony counts of elder or dependent adult abuse. From May 2015 through February 2016, Mr. Akinsete operated three unlicensed Room and Board homes in South Sacramento, luring gravely disabled elders and dependent adults into his homes with false promises of medical care, medication dispensing, transportation to and from medical appointments, food, and cleaning. None of the victims belonged in a Room and Board environment due to their inability to independently conduct their activities of daily living. As a result of Mr. Akinsete’s care, all six victims were gravely disabled, and suffered from severe mental and physical disabilities such as drug overdoses, psychotic breakdowns, septic shock, and infected odorous amputation sites; and 

• People v. Varenna LLC, Oakmont Senior Living LLC, and Oakmont Management Group, LLC:  On September 3, 2020, California Attorney General Xavier Becerra, in conjunction with Sonoma County District Attorney Jill Ravitch, entered into a civil settlement and injunction with the owners and operators of Varenna and Villa Capri (Varenna LLC, Oakmont Senior Living LLC, and Oakmont Management Group LLC) related to their conduct on the night of the Tubbs Fire. This settlement followed the filing of a complaint in Sonoma County Superior Court which alleged that the Defendants failed to: adequately plan for and train staff on emergency evacuations and preparedness of the facilities; timely and adequately notify residents of the need for an emergency evacuation during the Tubbs Fire; and provide adequate care or support to their residents. The Judgment requires the Defendants pay $500,000 in civil penalties and investigation costs and includes stiff injunctive terms that require enhanced disaster and evacuation plans and training, and the appointment of an Independent Monitor to ensure compliance.

We encourage anyone who suspects elder abuse or Medi-Cal fraud to call our hotline at (800) 722-0432 or file a complaint with our office at https://oag.ca.gov/dmfea/reporting.